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DEBT will make Christmas a time of misery for millions

I would call this legalised loan sharking that targets the poor.

The 69-year-old American, who pocketed £7million in wages and bonuses last year, is the mastermind behind one of the biggest payday lending firms in the UK — targeting borrowers with interest rates as high as 2,670 per cent.

Former investment banker Weiss heads DFC Global, owner of more than 500 outlets of The Money Shop.

The outfit is also behind a clutch of pawnbrokers, the Cash-a-Cheque chain and internet lenders Payday UK and Payday Express.

Almost HALF of DFC’s entire worldwide revenues come from the United Kingdom and Ireland.

This says it all. This says what is wrong with the Western World that is ruled by banks.

The banks lend money at 0.5% or lower. The poor lend money at 2,670%.

How can this happen you might ask? It happens because of special interest money and power.

Rachel explains.

Wealthy Wingnut Art Pope Steps Up to Screw North Carolina

You might recall this report from Rachel Maddow in August, 2009 at the height of the legendary Obamacare protests. She introduced her viewers to Art Pope, a name known only to those who ever bothered to follow the money. In the billionaire funders' universe, Pope is one that is rarely mentioned but has an enormous impact on the right-wing landscape. Here's an astroturf refresher:

Yes, elections have consequences, and North Carolina now has a hell of a consequence to contend with. Via the NewsObserver, this report about Governor-elect McCrory's appointment of Art Pope as "deputy budget director", a title invented for him by the soon-to-be governor of North Carolina.

Pope, who owns Variety Wholesalers, a retail chain that includes Roses and Maxwell stores, has been working as McCrory’s transition co-chairman. His new title will be deputy budget director, but that’s because by law the governor is the budget director. Pope will be the top staffer in developing the governor’s budgets.

Lets face it, the system of Govt is corrupt.

The SC with their C.Utd decision have only made things worse.

Q

Remarkable.You leak a story, and then you quote the story. I mean,that's a remarkable thing to do

Sad and true. As bad as the banking system is for the non-poor, the poor, near-poor and lower working classes are hosed. Payday advances, rent-to-own stores, and many other business models absolutely rape them financially. Not that banking isn't doing that to everyone else, but it's far more subtle in the mainstream. This is right there in your face. (To be clear, these parts of the financial system aren't exactly the banks, per se.)

Partially out of perceived necessity, and partially out of ignorance. The necessity seems real, as such poor credit risks will be charged substantial fees to have access to money. However, Truth in Lending rules only go so far, and so, typically, the APR and how much these things are costing at the end of the day are either not disclosed, or hidden.

- All have bank accounts and jobs or steady sources of income
- Majority make between $25,000 and $50,000 a year
- Average income is about $42,000 annually
- About 20% make MORE than $50,000 a year
- Majority have credit cards, are married and have children
- 42% are homeowners
- 94% have a high school diploma

Would we not agree that an ANNUAL Percentage Rate breaks down completely when trying to determine an appropriate cost for a one week loan?

Let's say we put a max APR of 26% on such loans ... now we demand that the lender make a $100.00 loan for one week, and only be able to charge $0.50 in interest. Does this honestly meet anyone's definition of being "FAIR" for the service provided?

The hard reality is that these are small and short term loans used primarily for emergencies ... and there costs are uite reasonable.

Maximum usury rates merely lock the poor and disadvantaged off of the bottom rung of the credit ladder.

The bottom line is that the working poor who the statists pledge to "HELP" are the people being savaged with the closing of payday loan joints.

What are their alternatives?

Usually it's write a bad check, pay a bounce fee of an easy double what the PDL places charge ... plus risk incarceration plus put another black mark on their credit. What a way to "HELP" Joe Baggadonutitz when hs transportation to and from work breaks down and he needs two Franklins to get it running.

His next alternative would be to miss a week of work.

Their next option would be a pawn shop, which is only a tad less expensive ... but requires collateral.

To all those who believe tat a profit can be turned at far lower rates ... where is the competition taking their business away?

Would we not agree that an ANNUAL Percentage Rate breaks down completely when trying to determine an appropriate cost for a one week loan?

A fair point, even an excellent one. You may have pointed out how bad the OTHER debt is, relative to this kind, in fact.

Why? Any one-time loss of money, whatever it annualizes to as an APR, is a one-time thing. Over and done.

Whereas the 'better' standard form of debt-- consumer rate debt, either cc or in-store cards-- at annually compounding (nominally) lower rates, will cost most people more both in gross amounts and in total percentage of interest to principle as well. How? Because few people pay off the debt, so it sits there semi-forever. You may even be paying interest on the interest.

When people do not understand the hamster wheel effect of debt-- lots of paying, little progress-- they do not rein in their balances and exercise spending control to save themselves a kind of debt slavery. And the NORMAL kind of debt and interest on it can and does lead to bankruptcy, and what's worse a bankruptcy where you STILL OWE AND MUST PAY THE MONEY (to your credit card providers).

So really, it IS far better in many ways to be gouged on a 100+% (annualized) basis (in the short term), since no interest is really due (you are paying what amounts to a one-time fee), and while the result can be impoverishing, it doesn't cause debt slavery for life. Unless as a result of the loss of that amount of money, the resort is to the kinds of consumer debt that DOES lead to it, which is a possibility.